Growth in prescription drug expenditures in the US is set to slow from 3.9% in 2011 to 2.9% in 2012, then dropping to 2.4% in 2013, according to new government forecasts.
But aggregate health care spending in the US will grow at an average annual rate of 5.7% during 2011-2021, which is 0.9% faster than the expected growth in the nation's Gross Domestic Product (GDP), according to new estimates from the Office of the Actuary at the Centers for Medicare and Medicaid Services (CMS).
The healthcare share of GDP is projected to rise to 19.6% by 2021, from its 2010 level of 17.9%, according to the new CMS estimates, which are published in the journal Health Affairs.
By 2021, US government spending at all levels for health care is projected to reach nearly 50% of total national health expenditures, with the federal government accounting for approximately two-thirds of that share, they add.
'The recent recession and the modest economic recovery have played a role in our projection of near-historic lows in health spending growth through 2013," says the study's lead author, Sean Keehan. "However, other factors such as Medicare payment cuts under current law and the patent expirations of several top-selling brand-name drugs have led to projected health spending growth staying at about 4% during this period," he adds.
The major effects of the Affordable Care Act (ACA) on overall spending levels are expected to be felt most acutely in 2014. The CMA actuaries forecast that the coverage expansions associated with the ACA for Medicaid and private health insurance will increase the growth rate for health spending to 7.4% in 2014, with notable increases in spending on physician services and prescription drugs by the newly-insured.
Throughout the latter half of the projection period, incomes are expected to be higher, and a large number of baby boomers are anticipated to be receiving coverage under Medicare. These factors, among others, are expected to drive health spending up around two percentage points faster than overall economic growth by 2020, consistent with trends in the US for about the past 30 years, the authors add.
The CMS’ preliminary assessments for 2011 indicate a continued near-historic low of a 3.9% growth rate in US health care spending, totalling $2.7 trillion and a stable share of GDP at 17.9% for the year. Health spending financed or sponsored by federal, state and local governments is estimated to have grown 6.4% and to have reached $1.2 billion, compared with a rise of just 1.9% to $1.5 trillion for health spending by businesses, households and other private sources, says the CMS.
National health care expenditures are projected to grow 4.2% in 2012 and then slow to 3.8% in 2013, with an expected slowdown in growth in prescription drug spending as several top-selling blockbuster drugs lose patent protection.
In 2014, as the ACA's major provisions take effect, health spending overall is expected to grow 7.4%, compared to 5.3% without the reforms, and with many of the 22 million newly insured anticipated to be generally younger and healthier, they are expected to devote a larger share of their health care spending to prescription drugs and physician and clinical services, and a smaller share to hospital spending, says the study.
Finally, the CMS actuaries forecast that national health spending will grow 6.2% a year, on average, during 2015-2012.